Digitalization Is Revolutionizing the Renewable Energy Sector

Renewable energy capacity increases faster than any other technology, as clean energy has never seen such high demand. A decline in investment is not due to a lack of interest, but more significantly, a considerable drop in the costs of green energy technology. Renewable energy investors need service providers that are familiar with the investment landscape at a local level, can adapt to the latest technologies, and have a clear vision of market evolution and regulations. This new sector, called Enertech, includes organizations that use new technology to find innovative solutions to increase the efficiency and optimization of renewable energy portfolios based on an advanced asset management.

Given the current context of climate change, coupled with the increased competition within the renewable energy market, energy investors are being forced to develop new ways to increase production and efficiency by limiting the use of fossil fuels and reducing prices throughout the value chain. It is becoming increasingly important for asset managers to be able to integrate and transparently manage the technical and financial performance of their energy portfolios, especially to minimize the risk of their investors.

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The Potential of IoT

The possibilites of the Internet of Things (IoT) and Big Data-analytics have revolutionized the future of the energy sector. Along with a solid digital infrastructure, IoT allows access to data almost anywhere in the world, and has the ability to analyze data mitigating the risk of investments in energy assets and to maximize the performance of portfolios. This type of analytics is the driving force behind standardized management of energy assets around the globe. This makes it possible to produce power, monitor performance and manage portfolios efficiently within large networks.

Successful data analysis can also help investors (banks, funds, etc.) to increase the productivity of their assets. If anything can encourage the financial community to further their investments, it is the promise of lowest risks and highest performance. It also enables new private investors to enter the renewables market, attracted by the potential value and the sector’s imminent growth.

Digitalization Unlocks the Potential of Renewables

The rise of renewables is not only beneficial to the environment, but also to the economy, with a recent industry study by the International Renewable Energy Agency demonstrating that global GDP would increase by over 1 percent to about $1.3 trillion if the market share of renewables were doubled by 2030. However, this will only be possible if renewable energy investors can rely on investment security, professional risk management, and standardized portfolio management for their assets, from anywhere and at any time.

To do this, all we need is the Internet and the capability to analyze smart data. Digitalization of the energy sector is the only way to help fighting against climate change and develop a sustainable development. The International Energy Agency (IEA) has been spreading this key message for many years: “Digitalization holds great promise to help improve the safety, productivity, efficiency and sustainability of energy systems worldwide. But it also raises questions of security, privacy and economic disruption.”

Globally, utilities are undergoing a cultural shift towards an information-based digital economy — where primary processes are digitalized — and moving away from the traditional business model that requires heavy investment in physical assets. In the face of this change, chief executives feel there is a real danger of getting left behind if they fail to rally their organization to the new digital order. The drive from leadership is key to the implementation of successful digital projects.

It is vital that there is a clear link between any digital project and a company’s strategic priorities. Digitalization should not make people feel alienated or excluded from the industry’s digital future. Companies need digital programs, projects and pilots to engage the right stakeholders, which extend beyond operations and often involve information technology, compliance and finance. In other words, remember to bring the right team along on the digital journey.

At a press conference during Asia Power Week, ABB, a Swedish-Swiss technology multinational, said that the power industry is “battling complex challenges and rapid change: shifting and ever-widening regulations, the large-scale integration of renewables and distributed energy resources, the increasing risk of cyberattack, a generational shift in the workforce, aging plant equipment, volatile dynamic pricing and business model disruption.” It stressed that digitalization, big data and analytics “offer a timely and uniquely powerful solution to solve these challenges. They give power and water companies visibility and insights into the performance of their equipment, plants and fleet that open new ways of operating more competitively in ever-changing markets.”

In order to compete, having a digital platform that makes it possible to actively steer and remotely monitor companies’ global investments is key to achieving client investment goals. IoT, smart data analytics and predictive data simulations of these platforms provide the necessary technical and economic KPIs automatically, up-to-the-minute and free of any type of manipulation.

Executive-level dashboards tailored to clients’ individual needs show the results of the system’s data analysis, which makes controlling and reporting processes much more efficient. This helps to substantially maximize the performance of the renewable energies portfolio while at the same time minimizing its risks. This ensures maximum transparency for investments in renewable energy assets on a global level – no matter whether investors are based in Buenos Aires or New York. The digitalization of power generation and energy asset management by using IoT and smart-data-analytics offers unexpected opportunities of boosting the expansion of renewable energies.